The owner of a new controversial iron ore mine in Tasmania's Tarkine region is denying it will temporarily stop production next month due to a drop in iron ore prices.

Shree Minerals opened its Nelson Bay River mine in October last year but there are are concerns dozens of workers at the mine could lose their jobs.

The Perth-based company started shipping iron ore in late January and in the same month told shareholders it had extracted almost 42,000 tonnes.

The company today told shareholders mine scheduling has been adjusted and it is taking steps to optimise costs under prevailing market conditions.

Shree says it has not made any decision to halt production.

But Circular Head Mayor Daryl Quilliam says some workers have been told they will not be needed for several weeks.

He says he understands mining will stop some time in June for up to three months.

"I was told that Shree will be stopping mining just for a short period of time and I understand it's because of the price of iron ore that has dropped," he said.

Greens leader Kim Booth says he has heard about 40 workers will be affected.

"Now what we've got is a big hole in the ground, a big hole in the public purse, damage to the environment that's going to take years to remediate and a whole lot of workers that have lost their jobs because the Government propped up something that was financially unviable," he said.